Leading money transfer company, Western Union Co. (
), has renewed its agreement with Safeway Inc. (
), one of the largest food and drug retailers in North America.
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Per the renewed contract which has a span of five years, the
money transfer company will continue to provide its Western Union
global money transfer services to the latter. In addition to
this, Safeway will also use Western Union money order and
consumer bill payment services in the U.S. from this year.
Western Union holds a solid reputation in the money transfer
market and has a wide global network of more than 5,000 agents.
Partnering with the company will enable Safeway to enhance
service to its customers.
Western Union is a leader in a growing market with a strong
global brand, a large and growing agent network, a global
organization with best payment capabilities and local market
Of late the company has faced regulatory issues in Mexico and
Latin America. It has also been facing declining pricing for
remittance service in some international markets, with related
loss of market share.
Nevertheless, in order to maintain growth amidst competitive
market conditions, Western Union has taken a series of strategic
growth steps. These include improved customer value proposition,
digital channel growth and implementing productivity and cost
Western Union is scheduled to report fourth quarter and full year
earnings on Feb, 12, 2013. The Zacks Consensus Estimates earnings
of 35 cents per share compared to 40 cents per share reported in
the year ago quarter.
Western Union currently retains a Zacks Rank #3 (Hold). We are
also maintaining our long-term Neutral recommendation on its
shares. Peer Moneygram International Inc. (
), also currently retains a Zacks Rank #3 (Hold).